Irma sweeps over Caribbean as Florida braces for powerful storm
06 Sep 2017 - 17:42
By Brian K Sullivan & Abigail Morris / Bloomberg
Irma passed over islands in the Caribbean and barreled toward Puerto Rico with Florida in its sights as the Category 5 hurricane threatens to become the most expensive storm in U.S. history.
Irma swept over Barbuda and Antigua on a path that should pass near or just north of Puerto Rico later Wednesday, the U.S. National Hurricane Center said, with a potential landfall in Florida this weekend. Barclays Plc has estimated insured losses in a worst-case scenario from the storm at $130 billion.
Irma “is the kind of storm where you get thousands of lives lost,” said Chuck Watson, a Savannah, Georgia-based disaster modeler with Enki Research. “This is not going to be the big slow-motion flood like Harvey -- this is a real, honest-to-God hurricane.”
Orange juice futures extended gains, reaching the highest since May 8, as the storm threatened the largest supplier after Brazil. Cotton prices also climbed on potential crop damage, while natural gas slid on speculation the storm will wipe out demand for the power-plant fuel.
Insurance stocks recovered after leading the S&P 500 Index lower Tuesday and an index of REITs was higher in early trading Wednesday. Cruise-line operators, including Miami-based Royal Caribbean Cruises Ltd. and Carnival Corp., had another day of declines.
Irma comes less than two weeks after Hurricane Harvey smashed ashore in Texas, knocking offline almost a quarter of U.S. oil refining capacity and causing widespread damage, power outages and flooding. While models show Irma veering away from gas and oil platforms off the coast of Texas and Louisiana, sparing Houston more devastation, it threatens to wreak havoc on the Caribbean islands and Florida.
Irma’s top winds were 185 miles (300 kilometers) an hour early Wednesday, making the system a Category 5, the highest measure on the five-step Saffir Simpson scale.
Anguilla’s Disaster Management Department said the island was experiencing extremely heavy winds and rain, the Associated Press reported on Wednesday. In Barbuda, phone lines went down and howling winds sent debris flying as people huddled in their homes or government shelters.
In the U.S., mandatory evacuations were issued for the Florida Keys and Governor Rick Scott said he expected additional evacuation orders. President Donald Trump said in a Twitter post that he is “watching hurricane closely” and his team is already in the state.
“This storm has the potential to devastate our state and we are taking it very seriously,” Scott said.
Were Irma to hit Miami with the same force as a Category 4 storm that struck in 1926, insured losses would reach $125 billion to $130 billion, Jay Gelb, an analyst at Barclays, wrote in a note Tuesday. Uninsured losses would be on top of that. Across the Caribbean the cost of damage could easily reach $8 billion to $10 billion, Watson said.
Losses from Katrina, both insured and uninsured, reached $160 billion in 2017 dollars after it slammed into New Orleans in 2005, according to the U.S. National Centers for Environmental Information.
While it’s too early to determine the exact path toward Florida, some damage modeling for a direct hit on Miami reach into the $200 billion range, Watson said.
Why We Expect More Havoc From Hurricanes Like Harvey: QuickTake
Only three Category 5 hurricanes have hit the contiguous 48 U.S. states, according to Weather Underground: the Labor Day Hurricane of 1935 that devastated the Florida Keys, Hurricane Camille in 1969 and Hurricane Andrew that cut across Florida in 1992.
In other storm news:
Tropical Storm Jose, further east than Irma over the Atlantic, is expected to become a hurricane later Wednesday, while Tropical Storm Katia formed in the Gulf of Mexico, the NHC said in advisories published at about 5 a.m. New York time.
At least 855 flights have been canceled to and from Caribbean islands within the radius of Irma’s potential track, Flightaware.com, an online tracking service, said late Tuesday. San Juan, Puerto Rico, has had the most cancellations, with 341.